In Munich on February 28, a German court ruled that EY Germany is not responsible for damages in a lawsuit brought by former Wirecard shareholders regarding its alleged flawed audits of the now-defunct payments group.
EY faced significant repercussions following the 2020 collapse of Wirecard, one of Europe's largest accounting scandals, which led to a two-year ban on undertaking new audits for public interest companies.
The court justified that EY could not be held liable because its assessments on Wirecard did not meet the criteria of "public capital market information," as stated by Judge Andrea Schmidt.
Peter Mattil, representing the plaintiffs, mentioned an intention to appeal, while Daniela Bergdolt from the DSW association of private investors indicated that claims against EY would be pursued in other legal actions if necessary.
An EY spokesperson maintained that the claims against the company are without merit.
The focus of the trial now shifts to former Wirecard CEO Markus Braun and the company's remnants overseen by administrators. Despite this, plaintiffs’ attorneys highlighted the challenges of pursuing claims against them due to the considerable shortfall between the claims and remaining assets.
In June 2020, Wirecard declared insolvency, leaving creditors owed nearly $4 billion, subsequent to revealing a 1.9 billion euro ($1.98 billion) discrepancy in its accounts attributed by EY to a complex global fraud scheme.
Wirecard was established in 1999, initially processing payments for gambling and adult entertainment websites before evolving into a prominent fintech company and a constituent of Germany's blue-chip DAX index.
(Note: $1 = 0.9611 euros)